Fed dissenter Kashkari says sees sympathy for his views


Kashkari, the lone dissenter who also voted against a rate hike in March, said the risk of raising rates too soon is a continuation of the central bank's "track record of coming up short of our inflation objective". However, there has been mixed analysis of how well the U.S. economy is truly performing. But while many of his colleagues were uncomfortable with risking a surge in inflation if the Fed failed to act, Kashkari was more anxious about the costs of excessively low inflation.

There has been a predictably sizeable focus on the Fed's $4.46 billion balance sheet, where the statement around the balance sheet did change enough to provide strategists with a belief normalisation is set to start from the September or October meeting.

The Federal Reserve should be cautious about any further interest-rate hikes, Dallas Federal Reserve President Robert Kaplan said on Friday, just two days after he voted with the majority of his colleagues to raise rates for the second time this year.

"We also anticipate a modest recovery in growth over the rest of the year, with or without Trump's stimulus package".

Their comments were the first public remarks by US central bankers following Fed Chair Janet Yellen's press conference on Wednesday to explain the Federal Open Market Committee's decision to raise rates for the second time this year.

Still, Kashkari, who ran the Treasury's bank bailout program during the 2007-2009 financial crisis, said the level of concern he feels now is "no comparison" to the feeling he had back then.

"If we are making a mistake, we are making a small mistake now that I think we can recover from", Kashkari said in the interview.

"I can't fathom how we could take that on at this minute", Kashkari said, adding that as a longer-term, big-picture question it is a legitimate topic of study.

"I really hope and believe she should be reappointed because there's nobody I can think of that would do better", Kashkari said.